Business Directories

Premium air travel up 4pc in June

London, August 20, 2013

Air travel markets stabilised in June after signs of deterioration in previous months and the number of passengers travelling in premium seats on international markets rose 4.1 per cent in the month compared to a year ago.

Economy class passenger travel rose 4 per cent in June year-on-year, in line with the 3.9 per cent rise in May, Iata said.

The Africa – Middle East premium travel markets recorded the strongest rise in routes on a year ago in June, up 21.3 per cent. While air travel in both regions is supported by solid economic and trade growth, the sharp rise in premium travel in June could be reflecting a pick-up in business travel prior to the start of Ramadan in July, the report said.

Continued signs of stability in the Eurozone are helping reduce downward pressure on growth in air travel markets, it said.

JP Morgan/Markit’s survey of purchasing managers indicates signs of modest growth acceleration in Germany, and weaker rates of slowdown in France, Italy and Spain. This improvement has helped support continued growth on markets linked to the region, with premium travel on Europe – Middle East; and Europe – Far East expanding 6.5 per cent and 5.1 per cent, respectively.

If current trends continue, growth in these markets should remain solid. That may likely be the case, with latest figures showing the Eurozone’s 18 month-long recession ending in Q2 2013, with GDP growth of 0.3 per cent for the quarter.

So far, however, there has been no significant improvement in premium travel within Europe, with growth of just 1.7 per cent in June year-on-year. Nonetheless, this rate of increase is above what was experienced during the first six months of 2013, with June year-to-date growth of 0.7 per cent.

Within Far East premium travel recorded a solid 9.0 per cent increase in June compared to a year ago, which is a notable improvement relative to weaker performance in the recent past. Fundamentals have been weak in the region – China’s economy and Asian trade have both slowed this year – so it is not clear if this pickup in growth will be sustained or it is largely due to volatility in travel volumes.

Moreover, growth in premium travel within Far East expanded 6.2 per cent in June year-to-date, about a third down on growth throughout 2012 (9.0 per cent). There was a slight reduction in the rate of decline in China’s export orders in July, but levels remain in decline for the fourth consecutive month.

Developments in the Chinese economy in the months ahead will help indicate the pace of growth in air travel in the region, it said. - TradeArabia News Service